ARIGNAR ANNA SUGAR MILLS Vs. CCE

JUDGEMENT

(1.) This appeal filed by the appellants viz. M/s. Arignar Anna Sugar Mills, arises out of the order in appeal Nos. 197 and 198/2001 -(C.Ex) TRICHY (PNV) dated 28.9.2001 passed by the Commissioner of Central Excise (Appeals) Trichy, whereby he has rejected both the appeals filed by the appellants before him against the order in original Nos. 76/97 and 5/2000. The original authority under the said orders in original had rejected the refund claims filed by the assessee.

(2.) The issue involved in both the appeals are identical and hence they are taken up together for disposal according to law. The brief facts of the case are that the assessees are engaged in the manufacture of sugar. While doing so, molasses emerges as a bye -product. On 10.7.1995 they approached the jurisdictional Assistant Commissioner, Thanjavur seeking permission to store molasses in kutcha pits within the licensed premises without payment of duty on the ground that their storage capacity in steel tanks is 13,000 MTs. The Assistant Commissioner, vide his letter dated 28.7.95 addressed to the appellants granted permission under Rule 173H for storage of duty paid molasses in kutcha pit within the licenced factory premises. Vide said letter the appellants were clearly Instructed that subsidiary invoices and a stock register has to be maintained for clearance of the duty paid molasses from the kutcha pits and the valuation rules in force should be taken into account for arriving at the assessable value of the molasses for payment of duty. Thereupon the assessee vide their letter dated 31.7.95 and 22.11.95 addressed to the Astt. Commissioner stated that since the market value of molasses is very less compared to their last sale and since there was no demand for molasses at that time, they were provisionally debiting in the PLA under protest based on the last sale value basis. They had aiso stated in the said letter that if the sale proceeds is less at the time of actual disposal, the excise duty adopted has to be adjusted on the future sale of molasses. Later on the assessee had preferred refund claim on the ground that a portion of the molasses stored in kutcha pit was sold at a price lower than the value adopted originally for payment of duty. Show cause notice was issued to the appellants vide C No. IV/16/82/95 -CxPol dated 24.10.96 to show cause as to why the protest lodged by them should not be vacated and their claim for taking credit of Rs. 4,67,259 should not be rejected. On receipt of the reply to the show cause notice and after granting personal hearing to their Consultant accompanied by their Senior Manager, the case wasdecided by the Asstt. Commissioner vide order in original dated 24.6.97 by which he has rejected their claim for the said sum. Another show cause notice C No. V/Ch.17/18/21/2000 -FC dated nil Nov.2000 was also issued asking them as to why the refund claim of Rs. 19,37,010.00 should not be rejected and after considering the reply filed by them and after granting personal hearing on 4.1.2001 the matter was adjudicated by the original authority vide Order in original dated 28.2.2001 rejecting their claim for the said amount and on appeal before the Commissioner (Appeals), the Commissioner (Appeals) upheld the order in original. It is against the said order in appeal that the assesses have come in appeal on the following grounds:

(3.) Shri V.P. Namasivayam, learned Consultant for the appellants invited our attention to the letter dated 29.12.1999 addressed to the Assistant Commissioner of Central Excise, Tanjavur wherein the appellants had requested for permission to destroy those quantity of molasses stored in kutcha pits as the Tamil Nadu Pollution Control Board has asked them to destroy the molasses and close the earthern pits immediately. They have also sent a reminder dated 14.8.2000 to the Assistant Commissioner, but no response has been received from him. He also referred to Rule 47 (5) of the CE Rules, according to which the Centra! Board is empowered to grant permission to store molasses without payment of duty subject to certain conditions contained therein. In this context he has also referred to Trade Notice issued by Calcutta Collectorate vide No. 102/1 -Molasses/83 dated 18.1.1983 by which permission to store non -duty paid molasses in Kacha pits against execution of Spl B -2 bond was given. However the said permission was withdrawn vide Patna Collectorate Trade Notice No. 108 dated 6.10.88. He has also invited our attention to the letter of the appellants dated 10.7.95 and 21.7.95 (filed in page Nos. 67 to 70 of the paper book) from the Chief Executive of the Appellants Company to the Commissioner of Central Excise seeking permission to store molases in kucha pits without insisting on payment of duty, as they are forced to store the goods due to insufficient capacity in their steel tank. He has also referred to the reply given by the Assistant Commissioner in response to their above cited letter, wherein the Assistant Commissioner has granted permission under Rule 172H for storage of duty paid molasses in kutcha pits, vide his letter dated 28.7.95, filed at page 71 of the paper book. He has also invited our attention to their letter dated 22.11.95 addressed to the Assistant Commissioner, Thanjavur wherein they have intimated that the last sale value of the goods per MT was Rs. 535 and that they were provisionally debiting the PLA account under protest. They had also requested that if the sale proceeds is less at the time of actual disposal the excise duty debited at the time of actual disposal has to be adjusted. He submitted that Rule 173H is not applicable to the present case though permission was granted. He has further submitted that in terms of Article 265 of the Constitution no duty can be collected without the authority of law. The learned Counsel on the above grounds sought for allowing their appeal.